A number of employers have asked us for workplace guidance in light of the coronavirus outbreak. Whilst we are not, of course, medically qualified to give advice on how best to deal with the virus, our friends at Keelys Solicitors have put together the following note which to a large extent reflects ACAS guidance.
Get the latest updates
All employers should regularly check the government website for up to date information about the spread of the virus and the risk to the public. This is likely to keep changing and you will need to keep your approach to the virus under review as the situation and Government advice develops. The Department of Health and Social Care will be publishing updated data on this page every day at 2pm until further notice.
Should employees be paid for time off?
If an employee actually experiences symptoms of coronavirus, they should go off sick immediately and be paid sick pay as usual.
Employees should follow normal absence reporting procedures if they’re not able to attend work. However, the employer might need to make allowances if, for example, employees are not actually sick but are quarantined, advised to self-isolate or are unable to leave an affected area. An employee might not be able to get a sick note in those circumstances.
Employees may not be showing any symptoms but may:
a) have been advised by a Doctor to self-isolate;
b) have been placed in quarantine as a precautionary measure; or
c) be abroad in an affected area and not allowed to travel back to the UK.
In those cases the employee is not actually sick. There is therefore no statutory right to pay if they cannot work for these reasons. However, firstly, it would be harsh not to pay staff in those circumstances where they are only following advice or are physically incapable of attending work. Secondly, saying that you will not pay them may cause staff to come to work instead of self-isolating and risk further spread of the virus.
We suggest that employees absent for these reasons are either treated as off sick or, by agreement with the employee, granted annual leave.
What happens if an employee returns from an affected zone and appears to have symptoms?
If an employee becomes unwell in the workplace and has recently come back from an area affected by coronavirus, ACAS guidance is as follows:
- Get at least 2 metres (7 feet) away from other people
- Go to a room or area behind a closed door, such as a sickbay or staff office
- Avoid touching anything
- Cough or sneeze into a tissue and put it into a bin immediately. If they do not have tissues, ensure that they cough and sneeze into the crook of their elbow
- Use a separate bathroom from others, if possible
The unwell person should use their own mobile phone to call either, for NHS advice: 111; for an ambulance, if they’re seriously ill or injured or their life is at risk: 999. They should tell the operator their symptoms and which country they’ve returned from in the last 14 days.
How should the employer respond if someone with coronavirus comes into work?
If someone with coronavirus comes to work, the workplace does not necessarily have to close. The local Public Health England (PHE) health protection team will get in contact with the employer to:
- Discuss the case
- Identify people who have been in contact with the affected person
- Carry out a risk assessment
- Advise on any actions or precautions to take
What rights do employers have regarding absence?
If an employee chooses not to attend work due to an outbreak, the starting point is that it is down to the employer’s discretion whether to pay them (for what could be quite a long period). We suggest you listen to your employee’s concerns and, if these are well- founded then, where practicable, you should consider granting home working, annual leave or unpaid leave. If an employee unreasonably refuses to attend work, they could be disciplined for that. Please seek advice before taking any disciplinary action, however.
If the employer has instructed an employee not to attend work, you could lay them off temporarily if you have a right in the contract to do so. They would then be entitled to statutory guarantee pay of £29 per day for the first 5 days. If you do not have the right to lay them off, you would need to continue paying them during this absence.
Employees are entitled to a reasonable amount of unpaid time off to provide assistance to a dependant in an unexpected event or emergency. This could well apply to situations to do with coronavirus. For example, schools may close and alternative arrangements for childcare may need to be made.
What can employers do to prevent the virus spreading?
Employers should consider the following steps to help prevent the spread of the virus:
- Make sure there are clean places for staff to wash hands with hot water and soap and encourage everyone to wash their hands regularly
- Give out hand sanitisers and tissues to staff, and encourage them to use them
- Consider if any business travel planned to affected areas can be avoided
If you are looking for further advice regarding the ongoing issues surrounding coronavirus and its impact on the workplace, please do not hesitate to get in contact.
We are very honoured to have Emma Spandrzyk of Keelys Solicitors share this guest blog with us. Her piece addresses some of the key insights many of you will have been thinking about when it comes to IR35.
I have recently joined Keelys in the employment department. I have been working as an employment solicitor for 9 years and, most recently, I have worked in-house for the police.
Some of our clients have been asking us about changes to the law on IR35 next year so we’ve taken some time to explain some of what is happening.
What is the current position?
If someone works on a self-employed basis but, in reality, they are an employee, HMRC can recover the underpaid tax and national insurance from the organisation that they work for.
Sometimes, the individual will set up their own personal service company to provide their services. If HMRC decides that the arrangement is a sham and that, if the individual was engaged directly by the client, they would be an employee, HMRC can recover the underpaid tax and national insurance under IR35. Currently, that is recoverable from the individual and/or their company rather than from the end-user. The exception to that is in the public sector, where the end-user will be liable for the tax and national insurance.
What is changing?
From April 2020 businesses with more than 50 employees or a turnover of more than £10.2m will be affected by the new rules. They will, therefore, be liable for tax and national insurance if they are found to be engaging people through personal service companies who, in reality, ‘are’ employees. If your business is smaller than that, you do not need to worry although we would not be surprised if, in future, these rules apply to smaller companies as well.
How to tell if someone falls within IR35?
If you are a larger business who will be covered by the new rules, the first step is to identify the contractors that provide their services through personal service companies.
To assess whether contractors fall within IR35, businesses will need to look at a range of criteria including the following:
- Control – how much autonomy does the contractor have in terms of how they deliver their work? If the business retains full control over how, when and where tasks are completed, this is indicative of employee status and the contractor is likely to be caught by IR35. If the contractor has full autonomy over the completion of tasks, they are more likely to fall outside the scope of IR35.
- Personal Service – does the contractor have to undertake the work themselves? The ability to send a substitute helps point towards a contractor being genuinely self-employed and outside the IR35 rules.
- Mutual Obligation – is there a requirement for both parties to continue to offer and accept work? If the business has an obligation to provide work and there is an expectation that the contractor accepts it, then this will indicate that the contractor is caught by IR35.
As part of the assessment, businesses should also consider factors such as the degree of integration that the contractor has with the business, the level of financial risk they assume and who provides the contractor’s work equipment.
What does this mean for your business?
Businesses will need to show HMRC that they have taken reasonable care in undertaking their contractor assessments. When reviewing assessments, HMRC will look at the size of the business. The bigger the business and the greater the resources available to it, the more effort HMRC will expect in relation to the process.
There is a useful tool on the HMRC website that you can use to assess whether someone is genuinely self-employed or should be treated as an employee: https://www.gov.uk/guidance/check-employment-status-for-tax
Written statements of particulars
Employers will be used to providing employees with a written statement of terms within two months of starting work. However, from the 6 April onwards, this will become a day one right.
This right will also extend to all categories of “workers” and will not be limited to individuals engaged under a contract of employment. It will, therefore, apply to zero-hours workers.
You may also have heard that some additional information should be included in the statement. However, we do not suggest that you make any changes to your contracts because the additional items are very minor. The key thing to ensure is that any new hires post 6 April are given a written statement on day one.
There is no obligation to issue your existing staff with a new statement. You only need to take this step if an individual specifically requests new particulars.
The reference period for determining an average week’s pay for the purposes of calculating holiday pay is increasing from 12 to 52 weeks. This is intended to limit the impact of seasonal fluctuations in work on holiday pay.
If you are currently using the 12-week model, you will need to amend any calculations to cover 52 weeks from 6 April 2020.
Under the “Swedish Derogation”, temporary work agencies can avoid the obligation to pay agency workers the same as the client’s direct employees after a 12 week qualifying period if certain conditions are satisfied.
From 6 April 2020, this derogation will be abolished. This means that all agency workers will have the right to pay parity with permanent employees after 12 weeks.
Tax on Termination Payments
At current, termination payments up to £30,000 can be paid free of income tax or employer’s National Insurance Contributions. Any amount over the £30,000 limit is subject to income tax deductions only.
From 6 April 2020, all termination payments above £30,000 will be subject to both income tax and employer National Insurance Contributions. This is in addition to the changes last year whereby all payments in lieu of notice are subject to tax and National Insurance.
Parental Bereavement Leave
Another right coming in to force on 6 April is the right to Parental Bereavement Leave known as “Jack’s Law”. Working parents who lose a child under the age of 18 will get two weeks’ statutory leave. We suggest you update your Dependent Care Leave Policy with the following wording to reflect this.
“Parental Bereavement Leave:
Staff who lose a child under the age of 18 are entitled to two weeks’ parental bereavement leave which can be taken in a single block of two weeks or as two separate blocks of a week each. The leave can be taken at any time in the period of 12 months after the child’s death. Staff with 26 weeks’ continuous service and weekly average earnings over the lower earnings limit will receive Statutory Parental Bereavement Pay during any period of Parental Bereavement Leave.”
Current Rates and Limits
April 2020 will also see the usual annual increase to the following rates and limits:
- The National Living Wage (for workers ages 25 or over) from £8.21 to £8.72 per hour.
- The National Minimum Wage rates:
Workers aged 21-24 – from £7.70 to £8.20 per hour
Workers aged 18-20 – from £6.15 to £6.45 per hour
Workers aged 16-17 – from £4.35 to £4.55 per hour
Apprentice rate – from £3.90 to £4.15 per hour
- Statutory Maternity Pay and Statutory Paternity Pay will increase from £148.68 to £151.20.
- Statutory Sick Pay will increase from £94.25 to £95.85.
Please let me know if you would like further advice on this. You may also want to speak to your accountant for advice on whether you are taxing staff appropriately.
Successful businesses rely on having the right number of people with the right skills to bring in the business, do the work and make money. At the same time, employing people also means ticking all those employment law boxes. Combining your legal obligations with where your business is heading is the key to great HR planning. As we reveal in this blog.
Factor in Legal, Tax and Fiscal Changes in Your HR Planning
When planning ahead you need to be clear about the immovable objects – the legal changes you must tackle and include in your planning. Employment law, tax and statutory payment changes tend to be introduced around April at the start of the new tax year.
Rates – like statutory maternity pay, tax thresholds, national minimum wage and statutory sick pay – are amended and will need to be factored into your budgets and processes. You can find this information on the government’s website which is updated each year.
It’s also worth being in the know about employment law changes in advance so you have plenty of time to prepare. Typically, updates will have a long lead-in time so you have plenty of time to prepare. Keep an eye on HR industry blogs, like this one, for details about new rules your company will need to abide by. Then factor them into your HR plans.
Be Clear on Where the Business is Heading
With your legal obligations clearly mapped out, it’s time to turn your attention to your business’ goals. They will provide the context for your HR plans. For example:
- Business growth – could mean new roles, redistributing work between individuals, increasing people’s hours, upping overtime or taking on additional headcount
- Business slow down – stagnant GDP growth might mean your business needs to tighten its belt. Perhaps you need to reduce headcount or ask your staff to increase productivity. However you decide to do more with less it will impact your HR strategy.
- Business stasis – if your business is neither growing or shrinking, there’s still a lot you can do. Tightening up on people processes, developing your team to ensure you future-proof your business and finding ways to positively impact the bottom line are all possible with good HR planning.
Anticipating your future HR needs should also look beyond your immediate situation and be based around economic and technological changes as well as what your customers will need in one, three and five years’ time.
With your legal and business priorities clear, you can now identify your HR priorities. You might decide to go for some quick wins first or tackle those issues that are causing you the most pain.
Alternatively, complete tasks that will add to the bottom line: this should create additional revenue that could be fed back into the business. Reinvesting in your people is one option that frequently drives even better business results.
Choose the Right HR Strategies, Systems and Providers
With a solid understanding of your current and future people needs, you can start choosing which areas of HR to dedicate the most time and resources to. If you anticipate significant talent gaps, training, recruitment and performance management strategies should help. Or, if your business is facing a tough time, a restructuring programme could be the key.
Getting this right is critical to the health of your business so if you don’t have sufficient HR support, it’s worth investing in an experienced HR consultant to provide expert advice and practical help.
Part of your HR planning should include a review of the systems you have in place to support your plans. There’s a wide range of HR technology available that:
- Makes it more efficient to administer your human resources
- Provides options for employees and managers to process standard requests like holidays
- Keeps track of employee data and gives you insight into your workforce with online reports
So, if spreadsheets aren’t cutting it any more, it could be time to consider going digital with your workforce administration.
Communicate Your HR Planning
Once you’ve firmed up your plans and put timescales, resource and budget to your changes, it’s time to communicate with your team. Start with leaders first to get their feedback and input if you’ve not already done this. Then roll out your plans to staff. Be prepared to answer questions like:
- What’s in it for me?
- Is my job at risk?
- Is the business stable?
- Where is the business heading?
- Will you provide training to help me adapt?
If your planned changes are significant you might want to hold face-to-face town hall meetings backed up by written communications including FAQs. Where changes are more incremental, cascading communications through line managers is a good approach.
With your HR plans in place, you might think you’re done for the next twelve months. But my experience tells me you’ll need to keep on top of any changes that the business and your people face. Combining annual planning with this level of flexibility will mean you’re ready to take care of any human resource issues that come your way.
Get your HR plans squared away with pragmatic, adaptable HR support from Crosse HR. Get in touch on 0330 555 1139 or at email@example.com.
Monitoring employees’ emails or not to monitor? That is the question! Nobody wants to be accused of being Big Brother, but monitoring employees’ emails is perfectly legal if you go about it in the right way.
“Always eyes watching you and the voice enveloping you. Asleep or awake, indoors or out of doors, in the bath or bed – no escape. Nothing was your own except the few cubic centimetres in your skull.”
― George Orwell, 1984
Data Protection and Employee Rights
As a business owner, you need to make sure your employees are carrying out their work effectively. You also have a responsibility to ensure they’re not using work email to do things they shouldn’t. Like sending offensive emails or sharing unprotected data. At the same time, you don’t want to encroach on your employees’ privacy or demonstrate a lack of trust.
Before we consider whether you should monitor employees emails, let’s take a look at whether you can.
The Information Commissioner’s Office states that, in general, it is considered intrusive to monitor your employees’ emails.
That’s because employees have a right to respect for a private and family life under article 8 of the European Convention of Human Rights. This means people can send personal emails from a work computer and email address and expect them not to be monitored or read by employers.
But what about work email?
It’s perfectly legal for employers to monitor employees’ emails as long as certain criteria are fulfilled. This includes being:
- clear about the reasons for the monitoring
- satisfied that the monitoring arrangement is justified by real benefits
- clear with employees for the reasons, extent and nature of any monitoring that’s in place
If you decide to monitor, you’ll need to warn employees that emails sent from a work computer may be observed. A good way to do this is to include suitable wording in your contract of employment.
Before implementing a monitoring policy, employers must carry out an assessment of the proposed activity to establish
- the reasons for monitoring staff and the benefits that this will bring
- any negative effects the monitoring may have on staff
- whether the monitoring can be achieved through any less intrusive means
- whether the monitoring is justified, taking into account all of the above
Think you might have sufficient reason to monitor? Then the next thing to consider is proportion.
In-depth or Light-touch?
Depending on your business and sector there may be highly valid reasons for monitoring staff email. For example, financial services organisations often monitor communications to ensure sensitive data is not being shared, accidentally or otherwise.
However, all businesses considering email monitoring should act proportionately and fairly to achieve the right balance between organisational needs and employee privacy.
In most cases assessing the date, time and recipient or sender of an email will help you determine whether it relates to work or not. Reading private emails, particularly those that contain confidential information is likely to breach an employees’ privacy.
Automated email monitoring can analyse huge amounts of email traffic, spot inappropriate content and deliver reports for managers. This distances managers from the emails themselves and raises a red flag indicating that further investigation is required.
Before jumping straight into an in-depth review of an employee’s inbox, it can often be a good idea to hold a meeting. By discussing how the individual has been using email and the kinds of information they’ve sent you can decide on a proportionate response.
The Potential Impact of Monitoring Employees’ Emails
Monitoring employees’ emails can create an atmosphere of distrust if implemented and acted on incorrectly.
In some sectors, like those with significant data protection requirements, employees are likely to be more understanding of the need for monitoring employees’ emails. However, organisations where data is less sensitive may not find employees so tolerant.
Should any breach in policy be identified, managers’ next steps are key to how your monitoring policy is perceived. Managers using the information inappropriately will bring the policy intro disrepute. However, used effectively – to curtail inappropriate behaviour or prevent action being taken against the business – employees will likely support the policy.
Coupled with well-handled conversations and a genuine respect for employees’ privacy, email monitoring can be helpful for businesses. However, history has shown most people don’t appreciate their emails being monitored so introducing this policy requires careful handling.
If you do decide to go down this route ensure you’re acting legally, in line with your policy and for the good of your employees as well as the health of your business.
For help navigating email monitoring and other employment contract issues, contact Crosse HR on 0330 555 1139 or at firstname.lastname@example.org.
Probation period not up yet? Thinking of saying goodbye to a new hire? Then something obviously hasn’t worked out. To ensure their departure goes smoothly, you need to give them the right amount of notice.
But how long should that be when an individual is still in their probation period? And what else do you need to consider? Read on for the answers.
Probation – Not Just For Criminals
Most employers operate a trial period for new employees – also known as a probation period – which can vary from a few days to several weeks or months. The length of probation should be clearly set out in the employee’s contract alongside the employee’s standard notice period.
But what happens if they hand their notice in, or you want them to leave, during their probationary period? Does the standard notice period apply? Or can you legally give less notice and hasten their departure?
It Depends on Length of Service
People with probation periods shorter than one month are not entitled to any notice so you can exit them from your firm immediately.
Of course, notice periods work both ways and employees can notify you of their intent to leave too. Which means you could be left in the lurch if someone leaves within their one-month probation period.
That’s why most organisations stipulate a probation period of three months. This often increases to six months for more senior roles and jobs that are difficult to recruit. By extending the notice period, both employers and employees are protected.
There are two types of notice that employees and employers must give.
Contractual notice is the agreed notice period, as set out in the employment contract, that must be given by either side to terminate the arrangement.
You can choose to give more notice than legally required. But of course you cannot give less than the law stipulates.
Typically, contractual notice periods are:
- Less than one week for staff with under one month’s service
- One week for people with between one and six months’ service
- One month for people who have recently passed their probation
These notice periods give both sides a degree of protection and tie in nicely with the following legal minimums.
If you don’t include a notice period in your employees’ contracts you have to abide by legally predefined notice periods based on the individual’s length of service:
- Less than one month’s service > no notice
- One month to two years’ service > one week’s notice
- Two years’ service > two week’s notice
- Three years’ service > three week’s notice
The notice periods increase by one week for every complete year of tenure. So someone with eight years’ service would need to give and be given eight weeks’ notice.
Notice Has Been Served – What Happens Next?
This usually depends on who gave notice and the reasons why.
If an employee gave notice and there’s no problem (like performance issues), you will probably want them to work for the duration. This helps your organisation by keeping work moving and giving you time to recruit.
If you’ve given notice to a member of staff during the probation period, it’s usually because performance or attitude is not up to scratch. Which might mean you don’t want the employee to come in.
In this instance, you will still need to pay them for their notice period and you can do this in one of two ways:
- Pay in lieu of notice – you end the employment before the individual serves their notice and pay them as if they had worked their notice period.
- Garden leave – the employee serves their notice but doesn’t do any work for your company. This might happen if they are leaving to work for a competitor. Again, they must be paid for the full notice period.
Nobody wants to recruit the wrong person for the role. But occasionally it happens. Protect your business by:
- checking your contracts of employment
- paying notice periods as required
- revisiting your recruitment practices to spot any gaps
If you want help protecting your business from the unexpected, get in touch with Crosse HR.
In this blog, we explore the differences between unfair dismissal and wrongful dismissal and explain how you can avoid falling foul of either.
The intricacies of employment law often trip business owners up. And one of the most common hazards is dismissing someone in line with the letter of the law. There are two kinds of dismissal that sound similar but mean very different things and you need to avoid getting either of them wrong.
Isn’t Unfair the Same as Wrongful?
Not quite. In fact, in legal terms, they are entirely different concepts, as we explain.
This happens when you breach an individual’s contract in the process of dismissing them. The most common breach is failing to give an employee the correct length of contractual or statutory notice.
When are employees protected?
Employees have this right from day one so you need to be vigilant from the outset of a new employment contract. If you cannot settle the issue via conciliation with HR support, you could be looking at a tribunal or court case.
Claims for £25,000 or less would be settled in an employment tribunal whereas those over £25,000, would require a county or high court action.
How much could it cost?
Damages are not fixed. The figure will be set in reference to the individual’s pay and benefits for the period of their notice had they received it. This can include items like a company car, bonus, health cover and pension payments.
The more senior the employee, the longer their notice period is likely to be and therefore the more costly their claim. It’s also worth noting that it’s unlikely you will be able to recover your court costs.
On the plus side, employees are required to look for a new job as soon as possible. If they secure one and work during what would have been their notice period, their new pay and benefits will be taken into consideration. This could reduce the amount of any monies owed.
What can you do to avoid it?
If you want to dismiss an employee, ensure you give them notice in line with their contract or statutory minimums. If you want the individual out of the business immediately, you could pay them in lieu of notice. This means paying them all their usual pay and benefits as if they had still been working up until the end of their notice period.
This is a very common practice and in many cases will be cheaper than paying court, salary and benefit costs. You’ll also save time and effort into the bargain.
What else do you need to know?
What constitutes wrongful dismissal is defined by referring to case law. This means that the most recent judgement on the topic sets a precedent by which wrongful dismissal is assessed.
As such, it can change form time to time so you need to keep abreast of any changes. Or work with someone who does that as their day job.
Employees are protected by law from being unfairly dismissed. It’s a statutory right and is based on the employer’s reason for dismissal. For you to defend an employee’s claim you must show that:
- the reason for dismissal is one of the potentially fair reasons listed in the Employment Rights Act 1996 including:
- statutory illegality
- some other substantial reason
- your conduct was fair and reasonable in the circumstances, taking into consideration the size and resources of your organisation. This means:
Both these tests must be passed: if you dismiss for a fair reason but carry out the dismissal unfairly, you will still be deemed to have acted unfairly. The only good news in this scenario is that the amount of compensation might be reduced.
When are employees protected?
Except in specific circumstances, employees must have a minimum of two years’ continuous service to qualify for the right to bring an unfair dismissal claim. And it can only be pursued in an employment tribunal.
How much could it cost?
Compensation is made up of a basic award (calculated on the basis of age, length of service and salary) and a compensatory award limited to one year’s gross pay or £80,541, whichever is lowest. This takes into account future loss of earnings and loss of statutory rights.
What can you do to avoid it?
If you have an employee who you want to dismiss, you need to tread carefully. The Acas Discipline and Grievance Guide provides step-by-step advice on dealing with challenging situations including capability and conduct.
If you find you have dismissed someone unfairly and you do not have a case to defend, you could reinstate or re-engage your employee.
What else do you need to know about unfair dismissal?
Sometimes an employee will pursue tandem claims. While this will mean a more complicated case it doesn’t necessarily mean more compensation as an employee would not be entitled to double recovery for the same loss.
What’s the key takeaway from all this? Bring in an HR specialist early on if you’re thinking of dismissing someone. It might cost you a few hours of their time but it’s likely to be a lot cheaper and quicker than getting it wrong and having to pay compensation and undergo a lengthy legal process.
If you need further advice or information on unfair dismissals or wrongful dismissals, then please contact us.
18 year olds can drink, smoke and drive legally. Also classed as young workers, they can even die for their country on the battlefield. But when it comes to work, they don’t have the same right to the National Living Wage (NLW) as other adults.
We discuss the background to this issue and debate the pros and cons of bringing young workers’ pay in line with the NLW.
What’s the Deal for The Younger Generation of Workers?
The national minimum wage has been in place since 1999 with the aim of guaranteeing a threshold below which no person should be paid (except apprentices who are paid far less).
Many people felt that this legislation did not go far enough and campaigned for a National Living Wage (NLW). This new level of pay was intended to provide people with sufficient income to ensure a decent quality of life.
From 1st April 2016, the government made the NLW mandatory for workers aged 25 and above. This represented a 50p per hour increase on the National Minimum Wage (NMW) which was £6.70 per hour at the time for workers aged 21 to 24.
This handy table shows the current levels of pay for workers of different ages.
This is an interesting state of affairs because equal pay for work of equal value and age discrimination are established in English law.
You cannot pay and man and woman differently for the doing work of the same value. You cannot discriminate against people because of their age.
Yet the government’s NMW and NLW policy clearly does both these things. Employers would be perfectly within their rights to pay a 24 year old the NLW when they’re doing the same job as a 30 year old who could be earning much more.
With the struggles young people face in terms of high rent, the difficulty of saving for a deposit on a house and the impossibility of securing a mortgage in a buoyant housing market, low pay is a pressing question.
The Debate – Should We Pay Younger People the NLW?
If we said that all men could only be paid the NMW there would be uproar. That’s because we recognise that when two people do work of equal value, they should be paid broadly the same.
However, can it really be said that a young person brings the same level of knowledge and experience as someone much older? Probably not in more complex roles.
Yet in lower skilled jobs that can be picked up quickly and easily there’s certainly an argument against this. Surely a young, less experienced person can deliver the same level of customer satisfaction as someone older in a retail role for example?
It has to be recognised that the NLW is not the pay that an employer must pay: it’s the pay they must not go below. This means that businesses are free to pay all workers more than the NLW to making it possible to achieve pay parity.
In fact, a number of larger firms have said they are unlikely to differentiate pay by age for workers aged 21-24. This is partly on legal grounds and partly because they want to ensure good employment relations. And it’s also because they are uncomfortable with treating people in their early 20s differently from those in their mid-20s.
Cost to Business
Of course one reason not to drop the age for the NLW is the cost to businesses.
An extra £910 per year plus benefits and tax could be enough to push some businesses under. And it might make it less likely that firms would employ youngsters when they could get someone with more experience for the same wage.
Hile business considerations are one side of the coin, quality of life is the other. People in lower paid roles tend to have little if any savings should something go wrong. £910 a year to these people is a significant proportion of their salary.
The cost to Education and Society
It can also be argued that making young people too comfortable in paid work could lead to lower rates of further and higher education.
The NMW and NLW have been put in place to address exploitation at work without encouraging young people to enter the labour market who may otherwise stay in college or go to university.
However, this argument only applies to those aged 18 to 21, whereas there are lower rates of pay for people aged 21 to 24. Whether this is the right way to encourage young people to go to university is questionable.
Increasing minimum pay levels might be difficult but it is certainly possible as the introduction of the NLW shows. Whether pay rates are ever made more equitable remains to be seen but you can be sure that, if they are, businesses will be expected to bear the additional costs.
Time’s up for large employers to submit their gender pay gap report. Our roundup explores what we can we learn from the submissions.
Remind Me What The Gender Pay Gap Is All About
All public and private sector organisations in Britain employing more than 250 people had to send their first gender pay gap report to the government by 31st March and 4th April respectively.
The report needed to identify pay differentials between men and women to show:
- Any differences in terms of hourly rates of pay – for example, men earn 10% more per hour than women
- The percentage of each sex at different pay quartile positions – this might show that the lowest paid quartile of the workforce is mainly female and the highest quartile mainly male
- Any bonus gap – such as men earning 20% more in bonuses than women
Both the mean and median figures need to be reported and organisations must provide a commentary explaining their results and what they intend to do to reduce any gap. Results are published on a government website and must also be publicly accessible on each company’s website.
What Not to Do
True to form, the Big Four exploited a loophole in the guidance and have been publicly named and shame for their action. Instead of including all employees in their figures, they omitted the data of their highest-paid individuals; their partners.
After facing criticism from the Treasury Select Committee, these leading consulting firms were forced to re-report their figures. In three cases the recalculation increased the median hourly gender pay gap.
||Original Gender Pay Gap
||Revised Gender Pay Gap
|Ernst and Young
The only exception was Deloitte which saw a slight decrease from 15.3% to 15.2%.
The moral of this story? Abide by the letter and spirit of the government’s reporting guidance.
The UK’s gender pay gap currently stands at 19.1% for all employees or 9.4% for those working full-time. Beneath these headline figures, the submitted reports reveal a range of results:
- A small number of organisations have a reverse gender pay gap – for example, Cambridgeshire Police pay women 12.9% more than men.
- At the other end of the spectrum are Phase Eight whose female employees earn 64.8% less on average than males.
- Other organisations, like the UK Armed Forces, are almost gender neutral paying women 0.9% less than men.
The main reason cited for the gender pay gap is that organisations have more men in senior roles where significantly more money is earned.
Take Easyjet: they pay women on average 51.7% less than men. The reason for this is that just 6% of UK pilots are women earning a mean salary of £92,400. In comparison, 69% of cabin crew are female earning an average salary of £24,800.
With such a gender divide between high and lower paid roles, it’s no surprise that there’s a massive pay disparity.
What can Easyjet do about this? Seeking to employ more women in pilot roles and more men in cabin crew roles would help close the gender pay gap. However, this will require more creative recruitment tactics to be used to attract the right numbers of suitably qualified candidates of each sex to the roles. And all without breaking equality laws.
What Does The Gender Pay Gap Mean For Employers?
With pay gaps now out in the open, customers, employees and potential future candidates will have access to the data. This will allow both men and women to factor the information into decisions like whether they want to apply to or remain with a company or do business with an organisation.
With the glass ceiling still evident in many organisations, this could be a particular consideration for female applicants when seeking career advancement.
Nicky Morgan, Minister for Women and Equalities, said the information would help women “use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve.”
However, it’s useful to remember that the data works both ways. Organisations that pay males less may find fewer men applying for roles or possibly even asking for higher starting salaries.
What happens next is in the hands of organisations, candidates, employees and customers. The gender pay gap reporting exercise could be an exercise in futility or a catalyst for change. We await next year’s reports with anticipation.
If you’d like the support of an experienced HR consultant to address your gender pay gap, contact Crosse HR on 0330 555 1139 or email at email@example.com.